Nearly thirty years ago Sam Walton initiated development of a program called Retail Link that would deliver sophisticated information on consumer behavior pulled from data embedded in product barcodes. At an estimated cost of $4 billion and development spanning several years of effort, Walmart had become a pioneer in data-driven management providing it significant business advantages evident in its extraordinary success. The more recent rise of entities such as Facebook, Google, and Amazon are also largely based on driving business through data collection, aggregation, and analysis. It’s a core part of these multi-billion dollar businesses and justifies the amount of investment needed in the systems and technology to make it work. Gaining greater and timelier understanding of their customers, members and visitors relative to buying patterns, trends, sentiments and much more informed a number of business decisions such as promotional campaigns, customer experience improvements and product mix gives them significant competitive advantages.
Heretofore the majority of organizations simply have not had the financial ability or a team of developers to invest in such capabilities. However, on the technology side, the availability of affordable Big Data analysis tools, e.g. Hadoop, has led organizations across industries and in the public and private sector to realize they now have the opportunity to take advantage of the tangible value of their data. As organizations work to become more information-centric for improving decision making and operational efficiencies they are also realizing a level of transformational change is required to address complexities in disparate and distributed operations. Additionally, IT’s focus over the years has primarily been on systems and technologies rather than gaining a deeper understanding of the business and how information could be best leveraged for its benefit. A new, more holistic approach to managing and using information across the enterprise is necessary to engage, evangelize and enable organizations to harness its actual and potential value. Thus, today we’re seeing the emergence of the Chief Data Officer role designed to bring a combination of proven business and technical acumen to apply in defining and implementing a comprehensive strategy for managing and using data for organizational success.
Like Walmart understood several decades ago information is beginning to be recognized as a corporate asset that can deliver strategic value and organizations are making an active shift in becoming more data-driven or information-centric in how they operate. Increasing pressure from competitors is creating the impetus for organizations to shift from being reactive in their view of business to a more proactive approach and eventually predictive. In a recent study, it was shown that data-driven companies are experiencing operational and financial success with a significant number of those performing better financially than their peers who were not leveraging data as effectively. The path to becoming an information-centric enterprise is non-trivial and requires transforming the organization especially those with disparate operations and IT infrastructure.
Most enterprises matured at a time before the importance of managing data was fully recognized and as a result, the functions were often separated. The responsibility for collecting, storing and extracting data is separate from the function responsible for using it. That is, the business owns the data and IT owns the applications, but the need for a new approach is clear. Introducing rigorous, top-down information governance and management is necessary to bridge the structural divide to gain better alignment between business and IT. Making this change requires executive leadership to champion information governance as a strategic initiative providing the authority to establish and implement consistent policies for how information will be managed across the enterprise.
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